2023 (9) TMI 357 - AT - Service Tax

Bank accounts frozen without justification, hindering business operations. Appeal successful.

M/s. Hotel Yashica Palace Versus Principal Commissioner of Central Excise & C.G. ST., Ujjain

M/s. Hotel Yashica Palace Versus Principal Commissioner of Central Excise & C.G. ST., Ujjain - TMI Issues involved:The appeal against the order rejecting the request to unfreeze the bank accounts.Summary:Issue 1: Confirmation of demands and freezing of bank accountsThe appellant appealed against two Orders-in-Original confirming demands of Rs.77,471/- and Rs.11,81,952/-. While the demand of Rs.77,471/- was deposited, the appeal against the demand of Rs.11,81,952/- was pending. The department froze the appellant's bank accounts after issuing a recovery notice for the latter amount. The appellant requested to defreeze the accounts, which was rejected. The counsel argued that most of the amount in question had already been deposited, and the frozen accounts had sufficient balance to meet any obligations. It was contended that freezing the accounts hindered the appellant's business operations due to lack of funds, and no justification was provided by the department for the freezing.Issue 2: Justification for freezing accountsUpon hearing both parties, it was observed that the appeal against the Order-in-Original confirming the larger demand was pending, and a significant portion of the amount had already been deposited. The appellant's business required financial transactions, and freezing the accounts impeded its operations. The department failed to demonstrate any alternative means for the appellant to sustain the business without access to the frozen funds. Consequently, the order declining the request to defreeze the accounts was set aside, and the appeal was allowed.This summary encapsulates the key details and reasoning behind the judgment without disclosing any sensitive information.